Post WW1 Funding

The story of house building in Britain in the immediate aftermath of World War 1 is one of commendable ideals thwarted by a lack of funds, skills and building materials. Much has been made of Lloyd George’s promise of “Homes fit for Heroes”, but that was more a battle cry and election promise than a scheme. What was needed was funding to encourage housebuilders to build new houses for a depressed market where rents and mortgage interest rates were artificially low and skills were short and therefore expensive to hire. The numbers simply did not add up and so the government had to make it attractive to build the housing, so desperately needed, by introducing Acts of Parliament that provided the funds needed. But why had this situation arisen when there appeared to be no problems before the war?

During WW1
As explained in the previous section, during the war a large number of working people moved around the country to work in the factories supplying equipment and munitions. To prevent profiteering on rents for those workers the Rent and Mortgage Interest (War Restriction) Act, 1915 was passed. This Act, with extensions to 1918, only allowed increases 6 months after cessation of hostilities. But before that 6 months had elapsed, an amended 1919 Act (Increase of Rent &c. (Restriction) Act of 1919) was passed that held rents and mortgage rates to those in place on Christmas 1918, plus 10%, up to 1921. The effect of these Acts was to make rents for new-build working class housing uneconomic. Added to the financial issues was the obvious one of shortage of skilled workers, particularly in brick making and laying, following the War. Another issue that was to be rectified in 1919 was that the State had no direct financial involvement in social housing (apart from the Well Hall Estate, see previous section) as this was still the responsibility of Local Government Boards (LGB). London’s LGB was dominated by the London County Council (LCC) and was in a much better position, financially, to be able to take opportunities.

1918
The Ministry of Reconstruction, led by the capable Christopher Addison, came up with a scheme to subsidise 75% of the deficit of new-house building costs for 7 years. At the end of the 7 years 75% of the deficit on any loans would also be subsidised. This was the first time the State had intervened in local government housing. The housing schemes needed state approval first, but there were no other restrictions. However, few LGBs had the funds or ability to take the opportunity. The LCC was one that did and allocated £500,000/yr towards house building. This offer by the Ministry never became an Act of Parliament, but was incorporated in the 1919 Act. There is no evidence that the LCC, or anyone, actually built houses using this offer of subsidy as the 1919 Act would have overtaken events whilst the housing schemes were still being planned.

1919
It was quickly recognised that the 1918 scheme was not going to help authorities outside London and a new scheme was introduced. 1919 was important for another reason: social housing came under state control. The Ministry of Health was created and took over the housing responsibilities of the LGB, much against the LCC’s wishes. The Housing, Town Planning, &c. Act 1919, known as the Addison Act, was passed through parliament and changed the way social housing could be subsidised. This Act took the findings from the 1918 Tudor Waters report on housing standards and included a compulsion on authorities to provide for local housing needs. In place of the 1918 subsidy on housing deficits, this Act chose to measure the financial effects on authorities better and would refund any deficit from house building that is above level of the produce of 1d in the £ on rates. This “1d on the pound on rates” was a measure used at the time and was beneficial in this case to poorer areas where the authority’s income on rates was low, and so had less capital to build new housing. The LCC’s calculation of the income of 1d on the rates in 1919 would equate to having to spend between 5 and 7million pounds per year on housing before any subsidy would be forthcoming; something they could never achieve. Despite this, the LCC built 8,820 houses and flats (this term came into use after WW1) under this Act. Many other local authorities took the opportunity to build social housing that was potentially going to cost them little.

1921
This period of bounty came to an abrupt end when Lloyd George’s coalition government abandoned all subsidies for house building. This coincided with the lapse of the Increase of Rent &c. (Restriction) Act of 1919, which would have resulted in a considerable increase in rents in the private sector. State assistance remained for all housing built or approved before 14th July 1921. Maybe the government were hoping that the inevitable rent rises would stimulate private house building. If this was the case, it was a forlorn hope as it would not be overstating the situation to describe the impact as being a house building slump. Even the wealthy LCC built little. Bearing in mind that most blocks and garden estate schemes took 2 years from planning to occupation, thus creating a delayed action on statistics, the number of new rooms available from the LCC in 1923 was a very creditable 20,146, but this slumped to 3,064 in the following year as the effects of subsidy removal kicked in. The 1923 building volumes were not seen again until 1928. The coalition government at the time were in trouble both morally and financially and there was a slump in industry. Raising finance was difficult for the authorities and even the LCC were encountering difficulties raising the necessary capital. To remove this cost on the tax payers may have been seen as a necessary evil, but it had far-reaching adverse effects on Britain and its ability to house the workers needed to resurrect the flagging industrial might of British industry.

1923
The economic situation had improved by 1923 to the extent that subsidies could be re-introduced. This time the subsidy would be a fixed amount per house, per year. The Housing Act 1923 was to resurrect the housing programs across the country and started a programme of social housing building that continued into the 1930s. The scheme was aimed at private builders (the Conservatives had come to power the year before), but local authorities could apply for the subsidies although they still had to raise the capital themselves. The basis of the scheme was simple; the State would pay the developer £6 per house per annum for 20 years for a 2 bedroom house, and £8 for a 3 bedroom house. The purchaser (of private housing) could also receive a £75 lump sum if they met the criteria of needing financial assistance. The LCC topped up the grant to private developers and the boroughs by £3/house, and more where large volumes of housing were built. The London Borough of Lewisham, in particular, took the opportunity to build a substantial number of houses and flats, alongside the LCC, using this grant system. The LCC eventually built 2,055 houses themselves under this grant scheme.

1924
The 1923 scheme was enhanced and the grants increased. The £6 grant was increased to £9 (£12 10s in rural areas) and the period extended from 20 to 40 years. The LCC topped this up by £2 5s to the boroughs. However, there was a little sting in the tail as the affordable rents charged could not add more than £4 10s on the rates. This was to ensure the housing built was cost-effective.

1926
The grants were reduced down to nearer 1923 levels but the building programs were now in full swing.

Smallholdings
It wasn’t just worker’s housing that was built. The government also wanted the farming industry to be injected with a new enthusiasm and discipline and encouraged county councils to purchase land for smallholdings. These would be offered to ex-servicemen.

There was a completely separate scheme to purchase land for returning soldiers to rent as a smallholding. The principles of funding, purchase and construction were the same as for the housing, but the rules were incorporated in the Land Settlement (Facilities) Act 1919. This Act was based on the 1908 Allotments and Smallholdings Act but provided loans for larger schemes that were directed at returning servicemen. The 1908 Act had enabled counties to fund the cost of boroughs, and parishes to purchase land for allotments and for the counties themselves to borrow money to purchase farmland to rent to local people to encourage them into farming. All counties made use of this funding but land purchase halted in 1914 when government loans stopped. The 1919 Act enabled larger amounts to be borrowed so that smallholding “colonies” could be created for the benefit of returning soldiers. As with the housing described above, you did not have to be an ex-soldier to rent a smallholding, but a priority was meant to apply. Surrey purchased land in Ripley, Banstead and Woodmansterne and split it up into smallholdings. They built houses on most plots and had the same problems as the local councils did with excessive costs to have them built.

Whether for workers or smallholders, what the authorities built were honest homes. Many authorities tried to build stylish houses on garden estates that had allotments and open spaces. Not all succeeded as there was always a compromise between quality and cost. Many turned to concrete and “blocks” as building materials, and with some success, but also with some failures. The next section covers the building styles and materials, and how modern materials were not introduced into the schemes early enough due to mis-management and in-fighting within the government departments set up to develop and test the new materials and methods.